Additional cost to the city to cancel: $16.3-$46.1 Million

Additional cost to the city to continue: $68.9 Million

 

Neither of these include the federal grant we would lose/spend at $45 Million.

 

So if you factor that in to the cancel price: $61.3-$91.1

The people against it will see a $50 million gap between cancelling and completing it as opposed to $20 million. It is human nature. The people for it see that ROI and other benefits left off.

 

I think the enquirer article sums it up nicely with the role the Haile foundation is playing. Also I agree with Sittenfield's position on this. It was a bad idea to begin this project with the financing in place and the last city council did a disservice to the city by going forward. That being said, the project has progressed along too far to halt and it is time to make some lemonade with what is left and make the best of it. The pragmatic approach is to finish it and have the asset and save the bus system because of it. WOrst thing that could happen is that federal bus dollars are put into play.

 

Cranley and council are right to be against this but wrong on not letting it go forward because of the additional damage that will be done to the city's reputation.

I humbly suggest that we refrain from guessing at figures and possibly lock this thread until everyone's had a chance to digest what the audit is actually saying.  This is confusing enough already without having everyone's separate interpretation floated.  Also, since we know the opponents read this thread, they may end up seizing on the worst of these interpretations.

Hold up. The $68.9 DOESN'T include the federal grant? So the net cost to THE CITY would really be 23.9M?? Or $8.9 if city wins Duke suit??

 

not correct.

Most of us are on the same side of this debate and look at how this data is diced down already?

 

Let the stakeholders handle this. It will come out better that way

From the Business Courier this morning: 

 

'No, nein, nyet

 

We're getting to the point where I'm thinking John Cranley's childhood puppy must have been run over by a streetcar.'

 

Ha!

 

http://www.bizjournals.com/cincinnati/morning_call/2013/12/five-things-you-need-to-know-today12-18.html

We all know how the audit is going to go from the questions asked.  The whole point of the audit was to confirm what smitherman and Cranley and murray wanted.  Flynn and mann were used.

 

I love being wrong :)

Now that the audit has come back saying it's going to cost more to complete than cancel the streetcar, it's all over as far as I can see.

 

Cranley & Co. have won this one, hands down. The two on-the-fence councilors will now vote to cancel.

 

There's no realistic hope the vote can or will go the other way, now.

I agree.  All this interpretation is bad.  If we are looking for a quick conclusion to what the analysis says, is it safe to just say it confirmed Deatrick's numbers?

 

If so, then that's $250k down the drain.  Mayor/Sheriff Will Teasle is a real genius.  Harvard must be proud.

Now that the audit has come back saying it's going to cost more to complete than cancel the streetcar, it's all over as far as I can see.

 

Cranley & Co. have won this one, hands down.

 

Game over!

 

"The SKY IS FALLING! THE SKY IS FALLING!"

So the city would shell out 100+ million and have nothing, than to finish? That is BAD BAD math. That's way way unacceptable.

Scott Sloane on 700WLW: "I'm leaning toward saying let's finish the damn thing."  Maybe the sky really is falling?!

From our friends at the Enquirer:

 

Report: It could cost $80 million to cancel the streetcar

 

http://news.cincinnati.com/article/20131218/NEWS/312180100/KPMG-releases-streetcar-report

And there is this tweet from local COASTer Pete Witte:

 

Pete Witte ‏@petewitte 11m

 

Just build the freakin' #cincystreetcar BUT manage this project better and never ever choose to fund streetcar before basic services.

And Cranley's response:

 

Carl Weiser ‏@cweiser 2m

 

BREAKING: Mayor @JohnCranley on KPMG study: 'I do not believe it is financially prudent to proceed." #cincystreetcar

 

He claims the city will save over $100 million if the project is crancelled.

 

Cranley will be answering questions at Cincinnati.com at noon today.

What a strange, sad little man.

^ Cranley's number includes the operating costs that SORTA offered to take off the books yesterday.

What ? A coaster is turning now?

We're getting to the point where I'm thinking John Cranley's childhood puppy must have been run over by a streetcar.'

Which left him with no use for his sharpened sticks.

Of course. 

 

Tell me, when we approved the money for the MLK interchange, did the operating costs for its useful life get included in the "project costs"?  Of course not. 

So when do the petitions get turned in?  Today or tomorrow?  I'll be interested to see what the final tally is, but I don't want that broadcast prior to dumping them at the feet of city council.

Ok, so the way I see this is:

 

* Maximum of $69 million of local money to complete without further delays, which is less than the $74 million Deatrick forecast

 

* $50 - 80 million of local money to cancel, which excludes any costs of litigation, loss of reputation, and the Present Value of economic benefits which have been estimated three times to be several hundred million dollars.

 

What am I missing?

Ok, so the way I see this is:

 

* Maximum of $69 million of local money to complete without further delays, which is less than the $74 million Deatrick forecast

 

* $50 - 80 million of local money to cancel, which excludes any costs of litigation, loss of reputation, and the Present Value of economic benefits which have been estimated three times to be several hundred million dollars.

 

What am I missing?

 

You are missing the fact that it is $68 million ADDITIONAL to complete, whereas the $50-$80 million factors in the $34 already spent. You are right on everything else.

I know this wasn't in the scope of the contract for KPMG (as stated in the intro), but it is still a very real potential cost:

 

KPMG’s analysis did not include the following:

 Potential cost of future litigation

 

Throw in the cost of that and it makes even more sense to complete.

To our accountants in the group: Sunk costs are never considered, correct?

 

Not even sure why I'm asking.  We know how this is going to go.  We need Flynn and Mann to have an epiphany.

Two things I've lost track of during all of this: 

 

1) What happened to the request for a ruling on whether Smitherman has a conflict of interest?

 

2) What happened to Quinlivan's recount?

So the total $105 million is including what has already been spent?  Not what is still projected?  So $105 total costs to city minus $34 which has already been spent gives $71 million to complete?  Am I looking at this correctly?  Then to cancel it'd be between $50 - $80 million.  So in theory it could cost the city $10 million more to cancel than complete.

^Laure waived her right to a recount.

Nevermind, just saw the cost to cancel include the incurred costs so my math doesn't work.  So now I have $71 million to complete, $12-41 million to cancel. If that is correct, it doesn't look good.

Ok, so the way I see this is:

 

* Maximum of $69 million of local money to complete without further delays, which is less than the $74 million Deatrick forecast

 

* $50 - 80 million of local money to cancel, which excludes any costs of litigation, loss of reputation, and the Present Value of economic benefits which have been estimated three times to be several hundred million dollars.

 

What am I missing?

 

You are missing the fact that it is $68 million ADDITIONAL to complete, whereas the $50-$80 million factors in the $34 already spent. You are right on everything else.

 

Don't forget that the $16M  (low end) comes from operating funds.

Two things I've lost track of during all of this: 

 

1) What happened to the request for a ruling on whether Smitherman has a conflict of interest?

 

2) What happened to Quinlivan's recount?

 

Quinlivan did not contest a recount since the likelihood of gaining that many votes was too remote. She decided it was not worth the additional costs of the recount (as advised by Burke). Since the new council has been seated, she no longer can go back and request a recount.

Thanks.  What about Smitherman?  Anyone know where that request stands?  I he has to abstain, would a 5-3 vote be enough to prevent a mayoral veto?  Or does it have to be 6?

Supporters that can show up today and tomorrow should point out to Council that they wasted $250,000 of taxpayer money to essentially confirm the numbers that John Deatrick provided almost a month ago. All because they didn't believe an expert with a great track record.  Just like they believed that Federal funds could be reallocated to local projects in spite of hearing from the FTA that they could not.  Just like they believed that the construction companies could simply move workers to other projects. 

 

There are a bunch of cave men (and women...Murray) running City Hall. 

Supporters that can show up today and tomorrow should point out to Council that they wasted $250,000 of taxpayer money to essentially confirm the numbers that John Deatrick provided almost a month ago. All because they didn't believe an expert with a great track record.  Just like they believed that Federal funds could be reallocated to local projects in spite of hearing from the FTA that they could not.  Just like they believed that the construction companies could simply move workers to other projects. 

 

There are a bunch of cave men (and women...Murray) running City Hall.

 

Supporters can only show up and speak today. Tomorrow there will be no public comment since special sessions of council don't require comments (and quite honestly won't change anything anyway since you can speak today).

 

Also, please don't go in there accosting people on council who could be swing votes (berate Smitherman and Cranley all you want).

There are only two unknowns here: the actual cancellation cost, which Cranley accepts as unknown so he chooses an average, and the ROI, which Cranley accepts as unknown so he chooses zero.

 

Someone should bring that up to council today. Blatant double standard that nobody can talk their way out of.

Supporters that can show up today and tomorrow should point out to Council that they wasted $250,000 of taxpayer money to essentially confirm the numbers that John Deatrick provided almost a month ago. All because they didn't believe an expert with a great track record.  Just like they believed that Federal funds could be reallocated to local projects in spite of hearing from the FTA that they could not.  Just like they believed that the construction companies could simply move workers to other projects. 

 

There are a bunch of cave men (and women...Murray) running City Hall.

 

Supporters can only show up and speak today. Tomorrow there will be no public comment since special sessions of council don't require comments (and quite honestly won't change anything anyway since you can speak today).

 

Also, please don't go in there accosting people on council who could be swing votes (berate Smitherman and Cranley all you want).

 

This is a big point.  We don't want to turn off either of the swing votes.  I'd caution against berating anyone, whether they deserve it or not, as it may come across as petty and hurt our cause.

There are only two unknowns here: the actual cancellation cost, which Cranley accepts as unknown so he chooses an average, and the ROI, which Cranley accepts as unknown so he chooses zero.

 

Someone should bring that up to council today. Blatant double standard that nobody can talk their way out of.

 

Good point.  If the cancellation cost being used is an average, the ROI should be an average as well.

Thanks.  What about Smitherman?  Anyone know where that request stands?  I he has to abstain, would a 5-3 vote be enough to prevent a mayoral veto?  Or does it have to be 6?

Smitherman will vote. Solicitor's office says no conflict.

There are only two unknowns here: the actual cancellation cost, which Cranley accepts as unknown so he chooses an average, and the ROI, which Cranley accepts as unknown so he chooses zero.

 

Someone should bring that up to council today. Blatant double standard that nobody can talk their way out of.

 

I agree. The term "return on investment" had better be trending in council chambers today, or I will be very disappointed. Cranley assumes it's zero, which is completely dishonest. Italicize, bold, underscore, highlight. Repeat ad infinitum. Shout it from the mountaintops.

 

And mention its benefits of ROI, including funding public safety. Building the streetcar means there will be more money for firefighters and cops. Canceling the streetcar means there will be $50-80m less.

Summary of press coverage today......

 

Audit: Could cost nearly as much to abandon streetcar as finish it http://bit.ly/1cAJGcb  via @917wvxu

 

Report: It could cost $80 million to cancel the streetcar http://news.cincinnati.com/article/20131218/NEWS/312180100/KPMG-releases-streetcar-report

 

The Cincinnati Streetcar and the classic double-standard applied to transit projects http://streetsblog.net/2013/12/16/making-private-donors-pay-for-cincy-streetcar-a-classic-double-standard/

 

Streetcar audit finds high costs to cancel, Operating costs also lower than previously projected http://citybeat.com/cincinnati/blog-5360-streetcar_audit_finds_high_costs_to_cancel.html

 

Cincinnati: graveyard of unfinished rail systems http://feedproxy.google.com/~r/TheAtlanticCities/~3/5Drked6EuEE/story01.htm

I think the enquirer article sums it up nicely with the role the Haile foundation is playing. Also I agree with Sittenfield's position on this. It was a bad idea to begin this project with the financing in place and the last city council did a disservice to the city by going forward. That being said, the project has progressed along too far to halt and it is time to make some lemonade with what is left and make the best of it. The pragmatic approach is to finish it and have the asset and save the bus system because of it. WOrst thing that could happen is that federal bus dollars are put into play.

 

Cranley and council are right to be against this but wrong on not letting it go forward because of the additional damage that will be done to the city's reputation.

Totally disagree.  This was a great project in conception; it certainly needed some better execution, particularly on the political side.  When it was first proposed the only councilors who were hostile were Cranley and Monzel.  It only became an issue when the 2010 Congressional midterms made it popular for politicians to be against development.

 

The only problem with this project is that so many other things are required to make it a success; specifically, the property around the route has to become more dense.  The first supportive thing done was the removal of parking requirements for new construction in OTR and downtown.  Creating a SID to push the operating costs onto the adjacent taxpayers is the best way to make sure development on the line is designed to maximize ridership (of course, so long as the zoning code allows for the greater density).

Newsflash: on 700WLW Dan Carroll and Chris Smitherman say streetcar first phase has NO ROI.

^Cranley also just said the same thing on cincinnati.com.  Wow.

I agree. The term "return on investment" had better be trending in council chambers today, or I will be very disappointed. Cranley assumes it's zero, which is completely dishonest. Italicize, bold, underscore, highlight. Repeat ad infinitum. Shout it from the mountaintops.

 

And mention its benefits of ROI, including funding public safety. Building the streetcar means there will be more money for firefighters and cops. Canceling the streetcar means there will be $50-80m less.

 

Someone needs to bring up the fact that Cranley accused Roxanne Qualls of benefitting from increased property values near the streetcar route ... and then today he claimed that the streetcar would bring zero benefits.  Which is it?

Cranley: "As you know it's a very small town..."

Will all the cancellation costs have to come out of the operating budget?

I agree. The term "return on investment" had better be trending in council chambers today, or I will be very disappointed. Cranley assumes it's zero, which is completely dishonest. Italicize, bold, underscore, highlight. Repeat ad infinitum. Shout it from the mountaintops.

 

And mention its benefits of ROI, including funding public safety. Building the streetcar means there will be more money for firefighters and cops. Canceling the streetcar means there will be $50-80m less.

 

Someone needs to bring up the fact that Cranley accused Roxanne Qualls of benefitting from increased property values near the streetcar route ... and then today he claimed that the streetcar would bring zero benefits.  Which is it?

 

Agreed. 

 

Also, it will be interesting to see what happens if Mann supports the project now.  Will Cranley actually veto a majority of council including his hand-picked vice mayor?  I think yes, but it seems like a bad way to start a four year stint together.  Especially since cancelling will be met with a direct vote.  Cranley would be wise to move on to new business.

 

Also, is there somewhere we can donate money, toys, or other goods for the families of the workers that will be laid off if council votes to cancel tomorrow?  Christmas is next week.

**NOTICE: PLEASE READ BEFORE COMMENTING AGAIN**

 

I want to ensure that everyone has accurate information and with the constant updating of the thread things get lost in the shuffle.

 

There has been a lot of speculation on the costs and assumptions made that are not accurate, so I want to clear everything up. I will unlock this page around 12:45 so that everyone has had an opportunity to read it without jumping to conclusions or burying this post and we can continue to have valuable discussions before, during, and after the meeting today.

 

City Council Meetings

 

The only time to speak to council is today. Comments start at 1:30pm and will continue until everyone is heard. There will be NO COMMENTS TOMORROW. You are allowed 2 minutes to speak. It is advised you keep the message positive. Do not berate anyone regardless of how right you are to do so. Do not threaten them (personally or to move out of the city, etc). There are other ways to get your point across. Do not ‘boo’ people you disagree with. Keep it classy and thank every member for their support. Especially those who make decision to support continuation (Mann and hopefully others). Thank you for your passion on the issue and hopefully facts rule the day.

 

THE FACTS*

 

The audit came back without considering Economic Return on Investment, future extensions, and litigation.

 

Money spent to-date: $34.0 Million

Money spent is largely considered a sunk cost. I wouldn’t include it with any figure, but you can do so if you choose.

 

The ADDITIONAL cost to the city (not including federal grants) according to the audit is

Termination: $16.3 – $46.1 Million

Completion: $68.9 + ($1.7 – 2.8 from delay) Million = $70.6 – $71.7 Million

Operations + Maintenance: $1.88 - $2.44 Million/year

 

There are some clarifications that need to be made about these numbers

 

Money included in the termination costs: Federal grant money already spent the city would have to reimburse: $4 Million

Money not included in the termination costs: Federal grant money not spent yet: $41 Million

If you believe this is lost money the city would “spend” if it is forfeited, the new total for termination is ($16.3 + $41.0) to ($46.1 + $41.0) = $57.3 – $87.1 Million

 

Earlier completion costs include Duke Energy relocation costs in escrow and contingencies which are $15 Million and $7.4 Million respectively. Neither of these are guaranteed to be spent and could be subtracted from the completion cost if everything goes perfectly (doubtful, but mathematically possible and likely somewhere in the middle).

 

Cost of Completion in best case scenario: ($70.6 - $15.0 - $7.4) = $48.2 Million

 

*Please send me a DM if any of my figures are significantly off. For clarity I rounded numbers to nearest 100k as the summary of the audit did. You can view the audit for yourself here.

Cranley: "Feds will cancel contract, deal will start unwinding by itself." So goal in pausing was actually to cancel? Deceit is malfeasance. And now you have the legal justification for a recall.

 

Chris Seelbach ‏@ChrisSeelbach 1m

Cranley just compared the Streetcar project to the BP oil spoil in the ocean.  This is not a joke.  That was really his comparison.